The Department of Health has published a list of procedures which are liable to be “cherry picked” by independent providers, and could be paid for at a lower rate.
The list is included in details of the proposed payment by results arrangements for 2013-14, published yesterday. They also confirm tariff policy will continue to increase financial pressure on providers next year.
Concerns have been raised for several years that non-NHS providers - such as independent sector treatment centres - may be being overpaid by the NHS because they often carry out less complex procedures.
It was pointed out these providers could “cherry pick” these cases at the expense of the NHS, and in June 2011 the NHS Future Forum called for “additional safeguards” to prevent this.
The tariff for 2012-13 included provision for the tariff price to be lowered for contracts which said patients were limited to particular, less complex cases, for example “terms which prevent them from treating patients of a certain age or with complications or comorbidities”. It is unclear how much this has been applied.
In October the DH said it would not “tackle this issue through changes to tariff structure”.
However, the tariff guidance for 2013-14 reiterates the “flexibility” allowing lower prices to be agreed in some cases, and includes a list of dozens of common procedures (page 168) which are often carried out in the independent sector.
A letter from NHS deputy chief executive David Flory yesterday said: “As well as improving guidance on this issue, we are providing a list of procedures which may be subject to patient selection (often on justifiable clinical grounds), with the intention being to give commissioners and providers a starting point for discussions about ensuring that a fair price is paid for the services being provided.”
Meanwhile, the announcement says the overall change in tariff prices will be a reduction of 1.1 per cent compared to 2012-12 – not 1.3 per cent as was indicated in NHS Commissioning Board guidance published earlier this week.
The PbR guidance published today confirms that providers have an “efficiency requirement” of 4 per cent, and assumed pay and price inflation of 2.7 per cent, giving a “net price adjustment” of -1.3 per cent.
However, it adds: “In addition, tariffs will increase on average by an additional 0.2 per cent in recognition of changes in underlying costs faced by providers.”
Foundation Trust Network chief executive Chris Hopson told HSJ the uplift was an improvement on earlier DH proposals which would have seen a 1.5 per cent reduction. He said the changes were a result of the FTN highlighting evidence about the high risk on providers. The changes would save providers £200m across England, he estimated.
He said: “We made a strong and effective case.” Mr Hopson also called for the annual tariff setting process in future to be “more open, transparent and collaborative”.
The 30 per cent marginal tariff rate for emergency admissions remains in place. However, the DH guidance says commissioners are “expected to budget at 100 per cent of tariff”.